US shares closed lower on Monday in light volume trading day, dragged lower by sluggish energy stocks as oil prices briefly hit their lowest in nearly three months.
The dollar slid ahead of the Federal Reserve's two-day FOMC meeting scheduled to begin today, while the yen rose despite expectations that the Bank of Japan will add further stimulus later this week with market participants questioning the impact of further easing.
USD/JPY slipped more than 1.3 percent to 104.09, while the EUR/JPY was down more than 1 percent to 114.53.
Meanwhile, the Fed is widely expected to stay put on policy at its meeting that ends on Wednesday, but traders were bracing for any possible signals from the Fed about a tightening later this year.
The dollar index, slid slightly by 0.1 percent to 97.173, below the previous session's high of 97.569, its highest since March.
The Aussie rose to 0.7536 against the buck as forex investors await inflation data on Wednesday which many believe will fall to a record low and will send a clear signal on the Reserve Bank of Australia's next move.
GBP/USD fell to 1.3058 overnight, pressured after a survey painted a subdued picture of Britain's manufacturing sector on Monday. Adding to the pressure on the pound were reports that Bank of England policymaker Martin Weale had dropped his opposition to an easing and now favored immediate stimulus.
